Almost 700,000 Scots have problem debts or are at risk of having them, according to a new report by debt advisory charity StepChange Scotland.

With 46% of those seeking help struggling with council tax arrears, StepChange called on Scottish local authorities to ensure they have sustainable arrangements that give people a fair chance to repay their debt.

It also recommended the Scottish Government task a minister with coordinating and developing a “high impact action plan to address the crisis that is blighting many lives and businesses across Scotland.”

StepChange made the plea after releasing its “Scotland in the Red” report for 2018.

Sharon Bell, head of StepChange Scotland, said she was alarmed by the increases in the proportion of clients struggling with household bills, particularly council tax.

StepChange Scotland said the average amount of council tax arrears its clients had was £2,017.

The Scotland in the Red report said: “We believe there are nearly 700,000 people in Scotland at risk of or in problem debt.”

The report said the social cost of problem debt amounts to about £750 million — with public services having to deal with mental health problems caused by debt and by demand for housing help.

Bell said: “The vast majority of StepChange clients are in problem debt due to circumstances they could not have prevented or planned for, such as unemployment, ill-health or reductions in income.

“We are seeing a record level of demand for help with problem debt with over a third of our clients having an additional vulnerability, such as illness.

“We need more signposting to free debt advice, as the earlier someone gets debt advice the greater their options may be and the less harm they could experience.”

A spokesman for the local government organisation Cosla said: “Scotland’s councils take this issue very seriously and do all that they can to help people who find themselves in arrears.

“All councils will have plans and procedures in place to help people with their arrears.”